What is CSR in Business? Indian Examples, Types, and Section 135 Explained

A company can earn profit and still be judged poorly if it harms people, ignores the law, or treats society as someone else’s problem. That is where Corporate Social Responsibility, or CSR, becomes important.

For BBA and MBA students in India, CSR is not just a theory from a business ethics chapter. It is part of how large companies plan budgets, manage reputation, work with communities, and comply with law. India also has one of the world’s most recognised mandatory CSR frameworks under the Companies Act, 2013.

CSR is easier to understand when it is linked to real decisions and communities.

What CSR means in simple terms

Corporate Social Responsibility means a company’s responsibility towards society, the environment, employees, customers, communities, and other stakeholders.

In simple words, CSR asks a basic question:

How can a business make profit while also acting responsibly towards people and the planet?

So, what is CSR in business? It is the practice of running a company in a way that goes beyond earning revenue. It includes obeying laws, being ethical, reducing harm, and contributing to social development.

CSR may include:

• Supporting education and skill development

• Improving healthcare access

• Protecting the environment

• Promoting gender equality

• Helping rural communities

• Funding sanitation, water, and nutrition projects

• Supporting disaster relief

  
  

In India, CSR has a special meaning because eligible companies are legally required to spend on approved social development activities.

Why companies practise CSR

Companies do CSR for several reasons. Some are legal, some are strategic, and some come from values.

One clear reason is social licence to operate. A factory, refinery, IT park, or retail chain does not exist in isolation. It uses land, labour, public infrastructure, natural resources, and social trust. CSR helps companies build a healthier relationship with the communities around them.

CSR also improves reputation. Customers, investors, employees, and regulators increasingly watch how companies behave. A company known for responsible conduct can build stronger public trust.

It also helps in employee engagement. Many young professionals prefer to work for organisations that support causes beyond profit. CSR volunteering programmes, sustainability projects, and community work can make employees feel connected to a larger purpose.

In India, another major reason is compliance with Section 135 Companies Act CSR rules. For qualifying companies, CSR is not optional charity. It is a governance requirement.

Environmental responsibility is one of the most visible forms of CSR.

The four types of corporate social responsibility

The types of corporate social responsibility are often explained through four broad categories: economic, legal, ethical, and philanthropic. Together, they show that CSR is not only about donations.

Economic responsibility

Economic responsibility means a company must be financially sustainable. A business that cannot survive cannot create jobs, pay taxes, serve customers, or support CSR projects.

This does not mean profit at any cost. It means earning profit through responsible products, fair pricing, quality operations, and long-term thinking.

For example, a company that invests in energy-efficient production may reduce costs and environmental damage at the same time.

Legal responsibility

Legal responsibility means obeying the law. This includes labour laws, environmental rules, tax laws, consumer protection laws, and company law.

In India, CSR also falls under a legal framework for qualifying companies. A company cannot claim to be socially responsible if it breaks wage rules, ignores safety standards, or pollutes beyond legal limits.

Ethical responsibility

Ethical responsibility goes beyond what the law demands. It is about doing what is fair, honest, and respectful, even when no one is forcing the company to do it.

Examples include fair treatment of workers, responsible sourcing, truthful communication, data privacy, and avoiding exploitative practices.

An ethical company asks, “Is this the right thing to do?” and not only, “Is this legally allowed?”

Philanthropic responsibility

Philanthropic responsibility is the most familiar form of CSR. It includes voluntary contributions to social causes such as education, healthcare, disaster relief, community development, and culture.

In India, many CSR projects focus on schools, hospitals, rural development, sanitation, livelihood training, and environmental conservation.

Philanthropy is valuable, but it should not be used to hide unethical business practices. Good CSR starts inside the business and then extends outward.

CSR under Section 135 of the Companies Act, 2013

India made CSR a formal legal requirement through Section 135 of the Companies Act, 2013. This made corporate social responsibility India a serious board-level issue.

Under Section 135, certain companies must form a CSR committee and spend on CSR if they meet specified financial thresholds. The rule applies to companies that meet any of these conditions in the relevant financial year:

• Net worth of ₹500 crore or more

• Turnover of ₹1,000 crore or more

• Net profit of ₹5 crore or more

  
  

Such companies are required to spend at least 2% of the average net profits of the preceding three financial years on CSR activities, as per the law.

CSR activities must generally align with Schedule VII of the Companies Act. This includes areas such as education, health, poverty reduction, gender equality, environmental sustainability, rural development, and support for national relief funds.

This article is for general learning only and should not be treated as legal advice. For exact compliance, companies usually consult legal and corporate governance experts.

Education remains a major focus area for CSR work in India.

Real CSR examples from Indian companies

CSR becomes clearer when linked to real companies. Here are a few well-known CSR examples Indian companies are often associated with.

Tata Group

The Tata Group has a long history of social development work through institutions and trusts connected with education, healthcare, livelihoods, and community welfare. Tata companies have supported initiatives in areas such as rural development, skill training, clean drinking water, and health services.

Tata Steel, for example, has been associated with community development in areas around its operations, including projects related to tribal communities, sports, education, and healthcare.

Infosys

Infosys has carried out CSR work through the Infosys Foundation and other initiatives. Its focus areas have included education, healthcare, rural development, arts and culture, and relief work during disasters.

For management students searching for Tata Infosys CSR initiatives, the comparison is useful because both show different styles of CSR. Tata’s work is strongly linked to a long tradition of community institution-building, while Infosys is widely known for foundation-led projects in education, healthcare, and public welfare.

Reliance Industries

Reliance Industries carries out CSR work through Reliance Foundation. Its initiatives have covered rural transformation, healthcare, education, sports development, disaster response, and livelihood support.

Reliance Foundation has also been associated with large-scale rural programmes and health support efforts. These projects show how large Indian companies can use resources, scale, and partnerships to reach communities across different states.

Healthcare camps show how CSR can reach communities with limited access to services.

Why CSR matters for future business leaders

CSR is not a side topic for BBA and MBA classrooms. It connects with strategy, law, finance, marketing, operations, human resources, and ethics.

Future managers will need to answer hard questions:

• Should a company choose a cheaper supplier if labour conditions are poor?

• How should a factory respond when local communities raise environmental concerns?

• How can CSR spending create measurable social impact?

• What should a board do if CSR becomes only a public relations exercise?

  
  

These questions show why CSR matters in business. It shapes how companies earn trust, reduce risk, attract talent, and create long-term value.

For students, understanding CSR for BBA MBA students means learning that business decisions affect real lives. Profit matters, but it is not the only measure of success. A good leader must understand compliance, ethics, community impact, and sustainability.

The best CSR is not random donation. It is planned, measured, transparent, and connected to genuine social needs. India’s CSR law has made companies more accountable, but responsible leadership must go beyond minimum compliance.

A future-ready business leader should know how to read a balance sheet and how to read the social impact of a company’s actions. That combination is what makes CSR a core part of modern management.